Newsline - February 20, 1997

RUSSIAN CITIES BAIL OUT BLACK SEA FLEET. Adm. Viktor Kravchenko, the
Black Sea Fleet commander, told a conference in Sevastopol that "donations from
38 cities and 43 districts of the Russian Federation worth more than 10.5
billion rubles (about $1.9 million at the current rate) have helped Russian
sailors to keep afloat," ITAR-TASS reported on 19 February. Moscow Mayor Yurii
Luzhkov has been an active supporter of the fleet and the city administration
has allotted 6 billion rubles for repairing the Moskva missile cruiser
and is building 300 apartments for serving officers in Sevastopol. The liberal
governor of Nizhnii Novgorod, Boris Nemtsov, has suggested establishing control
over Sevastopol by encouraging Russian businesses to buy up property and firms
in the city, according to Kommersant-Daily on 18 February. "Historical
justice should be restored by capitalist methods," Nemtsov said. -- Peter
Rutland

SOVETSKAYA ROSSIYA DEMANDS YELTSIN IMPEACHMENT. A statement
signed by the extremist Sovetskaya Rossiya Editor Valentin Chikin and
Zavtra Editor Aleksandr Prokhanov and published in Sovetskaya
Rossiya on 18 February called for the impeachment of President Boris
Yeltsin on the grounds that he has "handed over all power to an anti-national
group who have brought the country to a territorial and political catastrophe."
The writers objected to the election and inauguration of Chechen President
Aslan Maskhadov, who has explicitly called for Chechen independence. They also
criticized Yeltsin, Federation Council Chairman Yegor Stroev, and State Duma
Speaker Gennadii Seleznev for congratulating Maskhadov. Chikin and Prokhanov
claim that Maskhadov's inauguration marks "the territorial disintegration of
Russia, the deliberate flouting of the constitution, and the beginning of the
rapid degradation of Russia's entire state system." -- Robert Orttung

FSB OFFICERS ARRESTED FOR DRUG DEALING. Two officers fromthe
Moscow branch of the Federal Security Service (FSB) have been arrested on
suspicion of dealing cocaine, Segodnya reported on 20 February. The two
men, a lieutenant colonel and a warrant officer, were detained on 14 February
in a joint operation mounted by the Interior Ministry and the FSB. Their
detention follows the arrest on 10 February of three drug dealers involved in
selling 500 grams of cocaine with a street value of about $125,000.
Izvestiya on 20 February, citing unofficial sources, claimed that six
officers were involved. -- Penny Morvant

UDUGOV NAMED CHECHNYA'S CHIEF NEGOTIATOR WITH RUSSIA. Chechen President
and Prime Minister Aslan Maskhadov on 19 February named acting First Deputy
Prime Minister Movladi Udugov to head a six-man commission that is to negotiate
"inter-state" relations with Russia on the basis of the 31 August 1996
Khasavyurt agreement, ITAR-TASS reported. Also on 19 February, Russia's deputy
presidential representative for Chechnya, Viktor Medveditskov, told ITAR-TASS
that the situation of the ethnic Russian population of Chechnya has
significantly worsened since the withdrawal from Chechnya of Russian troops.
The head of the presidential guard created by Maskhadov's predecessor has
resisted Maskhadov's attempt to replace him, according to ITAR-TASS and AFP. --
Liz Fuller

IRKUTSK JOURNALISTS DETAINED FOR BRIBE-TAKING. Robert Sheptalin, the
editor of the Irkutsk newspaper Zemlya-Novyi poryadok, and Aleksandr
Shakhmatov, a member of the paper's staff, have been arrested on charges of
extorting a large bribe from a businessman. The newspaper is well-known locally
for its reports on corruption in the Irkutsk Procurator's Office, and the local
offices of the Interior Ministry, judiciary, and executive, ITAR-TASS reported
on 18 February. The Irkutsk procurator has informed members of the regional
legislature that an unnamed local businessman contacted the authorities
complaining that the two journalists initially wanted $1,000 for not publishing
an article critical of him and then demanded $20,000. The reporters were
allegedly arrested while taking the money. -- Robert Orttung

ARMS TRADE SHOULD BE STATE MONOPOLY. Minister for Foreign Economic
Relations Oleg Davydov said on 19 February that the state-owned company
Rosvooruzhenie should maintain its near-monopoly of arms exports, ITAR-TASS
reported. He said arms sales should be carried out "only under strict state
control." Although a total of nine firms now have permission to export arms, in
practice 98% of the trade, worth $3.5 billion in 1996, goes through
Rosvooruzhenie (see related story in Ukraine section on tank sales to
Pakistan). Rosvooruzhenie was under the tutelage of former presidential
security chief Aleksandr Korzhakov until his dismissal in June 1996. On 30
August, Davydov announced that his ministry has taken over the functions of the
Russian State Committee on Military-Technical Policy. -- Peter Rutland

HIGHER EDUCATION TEACHERS TO GET BACK WAGES. Finance Minister Aleksandr
Livshits, Education Minister Vladimir Kinelev, and Education Workers' Union
Chairman Vladimir Yakovlev signed a document on 19 February setting a timetable
for the payment of delayed wages to Russia's teachers, Russian Public TV (ORT)
reported. Teachers at colleges and vocational schools will receive wages for
November and December 1996 by June. The agreement does not cover salary debts
to secondary school teachers. The same day, about 160,000 education workers
took part in the second day of national protests over chronic wage arrears.
Similar protests were held in January and last autumn. -- Penny Morvant

CHERNOMYRDIN TO CHECK OUT STRATEGIC ROCKET FORCES. President Yeltsin has
asked Prime Minister Viktor Chernomyrdin to verify personally the command
system of Russia's Strategic Rocket Forces, NTV and AFP reported on 19
February. Chernomyrdin, accompanied by Defense Minister Igor Rodionov and
missile forces commander Igor Sergeev, will visit the forces' central command
outside Moscow on 21 February. Yeltsin's order follows Rodionov's public
warning in early February that the army does not have enough funds to maintain
the nuclear command centers. -- Penny Morvant

INVESTMENT SLUMP IN ENERGY SECTOR. Fuel and Energy Minister Petr
Rodionov said total investment in the industry in 1996 fell 16% compared with
the previous year, amounting to 104 trillion rubles ($18.4 billion), ITAR-TASS
reported on 19 February. Investment in the gas industry fell 5.5% and in the
oil sector 25.7%. Rodionov noted that investment fell by almost one-half in
1996, even in such major oil companies as Yukos and Sidanko. Oil production
dropped 2% in 1996, and has fallen 40% since its 1987 peak. Major foreign
investors are staying away pending the approval of a list of sites authorized
under the production-sharing law. Few of the earnings from oil exports find
their way back into capital investment: on the contrary, oil companies are
behind in paying their taxes and wages. Delovoi mir reported on 18
February that half of the oil pipelines are more than 20 years old, and 2% of
the oil is lost through leaks due to corrosion and accidents. -- Peter
Rutland

CENTRAL BANK TO TRANSFER HALF OF PROFITS TO BUDGET. The State Duma voted
364 to 1 with one abstention to override the Federation Council's veto on the
law stipulating that the Central Bank (TsB) must transfer 50% of its annual
profits to the federal budget, ITAR-TASS and Kommersant-Daily reported
on 19-20 February. In June 1996, the government challenged the independence of
the TsB by introducing a law requiring the bank to transfer $1 billion of its
1994 profits to the federal budget. The TsB responded to that move by
increasing the obligatory reserve requirements for commercial banks in order to
neutralize the inflationary impact of the transfer. A similar reaction to the
Duma's latest move may further tighten the liquidity squeeze in the banking
sector. -- Natalia Gurushina

DUMA PASSES RESOLUTION ON NORILSK NIKEL. The State Duma has passed a
resolution on state support for the giant Russian non-ferrous metals company,
Norilsk Nikel, which owes 1.4 trillion rubles ($250 million) to the
consolidated budget and 1.3 trillion rubles in wage arrears, ITAR-TASS and
Kommersant-Daily reported on 19-20 February. The resolution, which is
not legally binding on the government, introduces a ban on the sale of the
company's federal equity stake until the year 2000; obligates ONEKSIMbank
(which received the federal equity stake under the loans-for-shares scheme) to
return the stake to the government; stipulates that the government should repay
the loan to ONEKSIMbank in state securities; and obligates Norilsk Nikel to
float an additional share issue equal in value to the company's debt to the
federal budget. -- Natalia Gurushina

VChK BLASTS CUSTOMS PRIVILEGES. The Emergency Tax Commission (VChK) has
criticized the existence of individual customs privileges that resulted in the
loss of 12.4 trillion rubles ($2.2 billion) worth of budgetary revenue for
1996, Kommersant-Daily and Segodnya reported on 19 February. The
commission has decided to follow the IMF's recommendations and disband the
governmental bureau for international humanitarian and technological assistance
(headed by Yurii Saltanov), which received 1.1 trillion rubles worth of customs
benefits in the last year. VChK also warned the head of the State Customs
Committee, Anatolii Kruglov, against allowing companies and organizations to
postpone their customs payments, a practice that resulted in the loss of 3
trillion rubles worth of budgetary revenue in 1996. -- Natalia Gurushina

SHEVARDNADZE IN BAKU. Georgian President Eduard Shevardnadze arrived in
Baku on 18 February for a three-day visit intended to open what he termed a
"new stage" in the "strategic partnership" between the two countries, Russian
and Western agencies reported. Following a three-hour meeting during which
Shevardnadze and his Azerbaijani counterpart, Heidar Aliev, signed more than 20
bilateral cooperation agreements, including one on the export of Caspian Sea
oil and gas via Georgia, the two leaders reaffirmed their commitment to finding
a peaceful solution to all conflicts in the region, according to ITAR-TASS.
Addressing Azerbaijan's Milli Mejlis (parliament) on 19 February, Shevardnadze
criticized the inability of the CIS to safeguard the territorial integrity of
its member states, and argued that integration within the CIS should not impede
the desire of some of its members to join unspecified "European structures." --
Liz Fuller

PRO-GOVERNMENT DAILY CLOSES DOWN IN ARMENIA. The editorial board of the
Yerevan-based Aravot daily newspaper decided on 15 February to cease
publication, Armenian media reported. The paper's editor-in-chief and former
spokesman for President Levon Ter-Petrossyan, Aram Abrahamyan, claimed that
"the daily has fulfilled its mission as a free media outlet and exhausted its
resources as such." He denied rumors in Yerevan that it was closed down for
"political reasons." Nominally independent, Aravot largely supported the
government's policies and is believed to have been heavily financed by former
Interior Minister and current Yerevan Mayor Vano Siradeghyan and his
associates. -- Emil Danielyan

BOWING TO BEIJING OVER XINJIANG? Kazakstan has officially stated its
resolute opposition to any kind of separatism in China, according to a 19
February Xinhua report monitored by the BBC. The statement comes in the wake of
Uighur protest rallies in Kyrgyzstan and Turkey following Beijing's suppression
of violent riots staged in early February by the Uighur minority in the western
Chinese province of Xinjiang. On 18 February, the Chinese Embassy in Kyrgyzstan
described a demonstration that took place outside its offices in Bishkek as an
act of interference in China's domestic affairs, ITAR-TASS reported on 18
February. On 17 February, Turkey officially apologized for the burning of
Chinese flags by protesters but also declared its intention to "maintain an
interest" in the people of the Xinjiang region, AFP reported. -- Lowell
Bezanis

CENTRAL ASIAN ECONOMIC UPDATE. Turkmen President Saparmurat Niyazov
signed a $580 million agreement with three Japanese concerns -- Itochi, JGC,
and Nissho Iwai -- to build Turkmenistan's first polypropylene plant in
Turkmenbashy (formerly Krasnovodsk) on 18 February, RFE/RL reported the next
day. The Japanese government will reportedly extend a $400 million credit to
the plant which will produce 90,000 metric tons of polypropylene annually. The
U.S. firm CCL has won a tender for a three-year concession to run the Pavoldar
oil refinery in Kazakstan, RFE/RL reported the same day. The terms of the deal
have yet to be disclosed; the idle plant previously produced more than half of
Kazakstan's gasoline needs. Local officials in the Gorno-Badakhshan region of
Tajikistan are negotiating with China to open a border trading zone in the
Mugab district, according to an 18 February Tajik Radio report monitored by the
BBC. -- Lowell Bezanis

TURKMENISTAN AIRLINES BANNED IN NETHERLANDS. Dutch Transport and Water
Management Minister Annemarie Jorritsma-Lebbink has banned Turkmenistan
Airlines (TA) from landing at Amsterdam's Schiphol Airport, ITAR-TASS reported
on 19 February. The decision comes after a TA flight chartered in Dubai made an
unauthorized landing at the airport on 17 February. The flight was carrying 173
Sri Lankan Tamils who asked for asylum in the Netherlands. No details on
whether the Tamils will be allowed to stay in the Netherlands have been
released. -- Lowell Bezanis

ASSASSINATIONS, TYPHOID FEVER IN TAJIKISTAN. Unidentified assailants
killed seven people in different residential areas of Dushanbe within a
30-minute period on the evening of 18 February, Reuters reported on 19
February. Among those killed were two U.S. Embassy guards waiting at a bus
stop, a Russian serviceman, and an ethnic Uzbek scientist. The Russian Foreign
Ministry denounced the killings as anti-Russian; the U.S. called on the Tajik
authorities to apprehend the perpetrators. One of the other victims was a Tajik
policeman who worked at a psychiatric hospital; he was killed when a "patient,"
reputedly connected with the pro-opposition Sanginov brothers, was freed by his
associates. In other news, international aid officials in Tajikistan say that
at least 10 people have died and thousands have been infected in an outbreak of
typhoid fever in the capital Dushanbe, RFE/RL reported on 20 February. Some
3,000 cases of typhoid fever have already been reported. -- Lowell Bezanis

BELARUSIAN PRIME MINISTER CONFIRMED. Syarhei Ling on 19 February was
confirmed as prime minister in a lower-house vote of 97 to 8, with one spoiled
ballot, international agencies reported. Ling had been acting prime minister
since the resignation of Mikhail Chyhir in November. Chyhir resigned in the
runup to the November constitutional referendum because he disapproved of
President Alyaksandr Lukashenka's policies. Ling set out three key tasks for
the government: reigning in inflation, paying off wage arrears, and firing
incompetent officials. Ling had been deputy prime minister in charge of the
economy after the USSR broke up, and he was appointed economy minister in 1994.
-- Ustina Markus

UKRAINIAN PARLIAMENT FAILS TO RATIFY ZERO AGREEMENT. After a lengthy,
heated debate, Ukraine's parliament failed to ratify an agreement renouncing
Ukraine's share of Soviet assets in return for Russia assuming Ukraine's share
of the Soviet Union's foreign debt, international agencies reported on 19
February. Instead, deputies voted 233 to 70 to present Russia with a list of
conditions for ratification. The main condition was Russia's release of
detailed information on the Soviet debt and money held in the central Soviet
banking system when the USSR broke apart. Ukraine's share of Soviet assets
includes claims to gold, diamonds, hard currency, and property. Under an
agreement signed by Russian Prime Minister Viktor Chernomyrdin and former
Ukrainian Prime Minister Vitalii Masol in 1994, Ukraine was to give up its
share of 16.37% of Soviet assets in exchange for Moscow picking up Kyiv's
16.37% share of the $81 billion Soviet debt. The agreement has proved highly
controversial in Ukraine's parliament, but Russia is unwilling to renegotiate.
-- Ustina Markus

UKRAINE DELIVERING FIRST SHIPMENT OF TANKS TO PAKISTAN. Pakistani
Defense Minister Masar Rafi arrived in Kyiv on 18 February in connection with
the shipment of the first 15 Ukrainian T-80 UD tanks to Pakistan, Ukrainian
radio reported. Last year, Ukraine concluded a deal to deliver 320 tanks worth
$550 million with Islamabad. The country's largest arms sale to date, it was
criticized by Russian arms producers. On 19 February, ITAR-TASS reported
Russian Foreign Trade Minister Oleg Davydov said he is opposed to the arms deal
because Ukraine negotiated it without consulting Russia and it threatens India,
Russia's strategic partner in the region. Davydov said his ministry will not
issue licenses for the delivery of any components for the tanks from Russia.
Russia has been concerned over Ukraine's efforts to develop its arms industry
for foreign export because it views Ukraine as a possible competitor for its
own arms sales. -- Ustina Markus

UKRAINIAN JUSTICE MINISTRY OFFICIALS SACKED FOR CORRUPTION. Justice
Minister Serhii Holovaty announced an investigation has found evidence of
corruption and abuse of office by several Justice Ministry officials, Ukrainian
radio reported on 18 February. First Deputy Justice Minister Volodymyr Chernysh
and several heads of the ministry's departments were fired. Holovaty said the
evidence has been sent to law-enforcement bodies to initiate criminal
proceedings against Chernysh. Earlier this month, President Leonid Kuchma
launched a campaign against corruption in state bodies, sacking several
governmental officials. -- Oleg Varfolomeyev

U.S. RECONSIDERS POLICY TOWARD BELARUS. U.S. representatives at the OSCE
said the U.S. is reconsidering relations with Belarus until the Belarusian
government brings its policy into line with internationally accepted standards,
Belapan reported on 18 February. U.S. government contacts with Belarus's
government and parliament will be reduced. The U.S. also supports suspension of
international lending institutions' programs in Belarus. American trade and
development agencies will suspend their activities except to protect U.S.
investments and support development of the private sector. At the same time,
the U.S. government will continue to support democratization, defense of human
rights, and independent media, and it will continue humanitarian aid to
Chornobyl victims. -- Sergei Solodovnikov

ESTONIAN FOREIGN MINISTER VISITS GERMANY. Toomas Hendrik Ilves, at the
European Commission office in Bonn on 18 February, urged the EU to consider
Estonia's successful reforms and not its geopolitical position when enlarging.
The next day, German Defense Minister Volker Ruehe told Ilves that it will not
necessarily be the same countries that join the EU and NATO initially, BNS
reported. He said Germany will tighten security and political ties with
Partnership for Peace countries that are not included in the first round of
NATO expansion. Ilves also discussed security questions with German Foreign
Minister Klaus Kinkel, who just returned from a visit to Moscow. -- Saulius
Girnius

LATVIA, TURKEY SIGN ECONOMIC AND MILITARY COOPERATION AGREEMENTS.
President Guntis Ulmanis, accompanied by Foreign Affairs Minister Valdis
Birkavs and Defense Minister Andrejs Krastins, began a four-day official visit
to Turkey on 18 February. Birkavs signed agreements on protection of
investments and on economic and trade cooperation and agreed to work on a
free-trade agreement. The next day, Krastins and Chief of the Turkish General
Staff Ismail Hakki Karadayi signed a military agreement on boosting cooperation
in the technical, scientific, and training sectors, BNS reported. Krastins said
the accord was important since it improved cooperation with another NATO
country. Ulmanis also discussed the expansion of the EU and NATO with Turkish
President Suleyman Demirel and Prime Minister Necmettin Erbakan. -- Saulius
Girnius

NEW CHIEF OF POLISH NATIONAL SECURITY OFFICE. President Aleksander
Kwasniewski on 19 February appointed Marek Siwiec as head of the National
Security Office (BBN), Polish dailies reported. Siwiec replaces Jerzy Milewski,
a former Solidarity activist, who died last week. Siwiec, 41 years old, remains
presidential adviser in the rank of state secretary. Siwiec said he will try to
establish a National Security Council and continue the BBN's work on a law
providing for additional funds for the modernization of the army. He added that
the referendum on NATO membership, proposed recently by the post-communist
Social Democratic Party, is a bad idea. The BBN will also identify
extra-military dangers to the state, such as crime or financial scheming.
Kwasniewski will himself head the Committee on Political Strategy, headed until
now by Siwiec. -- Jakub Karpinski

HUNGARIAN, POLISH FOREIGN MINISTERS ON NATO. Laszlo Kovacs visited
Poland and met his Polish counterpart Dariusz Rosati on 19 February,
international media reported. The two ministers applauded "the timetable and
philosophy for NATO's enlargement" set recently by U.S. Secretary of State
Madeleine Albright. They said Polish and Hungarian aims and views relating to
NATO enlargement are identical. They added that the process of establishing
NATO-Russia relations should not slow down the process of NATO enlargement. The
ministers welcomed Albright's reassurance to countries that might not be in the
first group of new NATO members that enlargement is an open process and will be
continued. -- Jakub Karpinski

CZECH PREMIER IN ICELAND. Vaclav Klaus and Iceland's prime minister,
David Oddsson, discussed the Czech Republic's admission to NATO at a meeting in
Reykjavik on 19 February, international media reported. After the meeting,
Oddsson said he believes the Czech Republic will be among the first countries
invited by NATO for talks on membership in June. Klaus said that NATO expansion
must be prepared in a way that does not harm relations between NATO and Russia.
Klaus made a one-day visit to Iceland on his way to Canada. -- Jiri Pehe

SLOVAK NATIONAL THEATER CANCELS STRIKE ALERT. Actors at the Slovak
National Theater (SND) on 19 February canceled their strike alert after
"constructive" talks with SND General Director Miroslav Fischer, Slovak media
reported. All theaters across Slovakia were to join the strike, protesting
government interference in cultural affairs. The situation at the SND has been
tense since July, when Culture Minister Ivan Hudec fired the SND stage
director, Peter Mikulik. Tensions reemerged on 8 February, when Fischer
appointed Leopold Haverl as SND stage director even though Haverl did not
participate in the public competition for that post, held in December. During
the talks on 19 February, Fischer and the actors agreed on a compromise
candidate for stage director, Juraj Slezacek, who placed second in the December
competition. Actor Emil Horvath won that competition but is "unacceptable" to
Fischer. Another controversial move involving Slovak theaters was the recent
firing of Karol Spisak, director of the Nitra puppet theater. -- Sharon
Fisher

SLOVAK DEMOCRATIC LEFT SEEKS DISCUSSION WITH OPPOSITION PARTIES. Party
of the Democratic Left (SDL) Chairman Jozef Migas on 19 February said his party
insists on the bill banning the privatization of Slovakia's four largest banks
even if the vote on the law is connected with a confidence vote in the
government, CTK reported. The SDL wants to hold a meeting of the leaders of all
parliamentary parties to discuss possible steps if the government loses a
confidence vote. SDL Deputy Chairwoman Brigita Schmoegnerova said Premier
Vladimir Meciar is pressing for quick bank privatization to provoke early
elections. "By actually completing the connection of political and economic
power, Meciar and his movement would take control of the whole society
politically and economically," Schmoegnerova said. Also on 19 February,
Transport Minister Alexander Rezes announced he is leaving his post in March.
Rezes said he will publicly, economically, and politically stay with Meciar,
adding that Slovakia would need "ten Meciars." -- Anna Siskova

HUNGARIAN FARMERS TO STAGE ROAD BLOCKADE. The National Federation of
Hungarian Farmers on 19 February announced a warning demonstration blocking
state roads, Hungarian media reported. The blockade, scheduled for 24 February,
will affect the Bacs-Kiskun and Borsod-Abauj-Zemplen roads. The federation is
demanding the revocation of tax and social insurance laws that took effect on 1
January. If the previous legislation is not restored by 5 March, the farmers
plan to organize state-wide action on 10 March. A meeting on 19 February
between farmers and representatives of the ministries of agriculture and
finance failed to break the deadlock. -- Sharon Fisher

U.S. PROPOSES 'SPECIAL' POLICE FORCE IN BRCKO. Washington will back an
initiative to create a UN-mandated police force to help an international
supervisor in the disputed Bosnian town until March 1998, when a final decision
on Brcko will be made, AFP reported on 19 February. Arbitrators decided on 14
February to postpone for another year the decision on who should control the
town claimed by both Serbs and Muslims. The U.S. is ready to contribute
personnel to the police force, which would be separate from the NATO-led
Stabilization Force (SFOR) but--in contrast to the existing UN police
force--would be armed and authorized to use force. The existing UN police could
not cope with incidents that might occur if thousands of Muslims and Croats try
to return to Brcko. In other news, James Pardew, a senior U.S. envoy in charge
of the military aid program for Bosnia's Muslim-Croat federation, said that
efforts to merge the Bosnian Muslim and Croat armies are in danger due to the
inter-ethnic clash in Mostar, Reuters reported on 19 February. -- Daria Sito
Sucic

BOSNIANS GAVE WORLD BANK MONEY TO TOWN ON AID BLACK LIST. The World Bank
said on 19 February that Bosnian Muslim authorities illegally allocated some
$200,000 to Bugojno, a town in central Bosnia that is under an aid embargo by
the World Bank and the high representative for Bosnia-Herzegovina, Carl Bildt,
AFP reported. Bugojno is embargoed for all but humanitarian aid because its
Muslim authorities refuse to allow the minority Croat population representation
on the local council. The money came from a $100 million loan from the Dutch
government and the World Bank. The Dutch ambassador to Bosnia, Valerei Sluyter,
said she did not know what the money was used for or whether the Bosnian
government has fulfilled its promise to take the money back from Bugojno. --
Daria Sito Sucic

CROATIAN FOREIGN MINISTER IN BELGRADE. Mate Granic and his Yugoslav
counterpart Milan Milutinovic met on 19 February to push ahead with normalizing
relations between their countries, international and local media reported.
While peaceful reintegration of the last Serb-held region of eastern Slavonia
into the rest of Croatia dominated their agenda, they reached agreement on
nearly 18 other issues, including citizenship, frontier trade and traffic,
border crossings, cooperation between interior ministries, and the rights of
Croats in Yugoslavia and of Serbs in Croatia. The two are expected to sign
agreements in a few months on transportation, succession talks, missing
persons, and refugees and property issues. Meanwhile, Serb leaders in eastern
Slavonia warned that 50% of Serbs in the area will leave by the end of the
spring as they are being treated unfairly, AFP reported. -- Daria Sito Sucic

SERBIA'S HARDLINERS ON THE OFFENSIVE AGAIN? Mirjana Markovic, wife and
main political ally of Serbian President Slobodan Milosevic, on 19 February
lambasted the opposition Zajedno coalition. In the state-run Borba,
Markovic alleged that the opposition wants only to seize power and behaves like
"diseased animals." In other news, Radio Index on 19 February reported that
local Socialist Party officials in Leskovac are refusing to remove the local
sacked party boss from his mayor's post, apparently in defiance of opposition
wins in the locality following 17 November municipal runoff elections.
Elsewhere on 19 February, protests by teachers and students continued and
Zajedno formally agreed that Zoran Djindjic, leader of the Democratic Party,
will stand as mayor of Belgrade. -- Stan Markotich

JAIL STRIKE BROADENS IN ROMANIA. Inmates in a Craiova prison launched a
sympathy protest with fellow inmates of the Jilava prison in Bucharest who have
been on a hunger strike since 17 February, Reuters reported on 19 February. The
Jilava prisoners asked authorities to improve living conditions and speed up
cases delayed in the courts. The prison holds 3,500 inmates, more than double
its capacity. Chief Warden Ion Parjol said that while most of the prisoners'
complaints were justified, conditions cannot be improved due to lack of funds.
Gheorghe Lazaroiu, warden at the Craiova prison, warned of the possibility of a
chain reaction. Romanian judicial sources reported that more than 45,000
inmates are being held in 35 prisons, about three times the acceptable
capacity. -- Zsolt Mato

MOLDOVA ATTACKS RUSSIAN DUMA'S DECISION TO SET UP DNIESTER PANEL.
Members of the Moldovan parliament denounced as "interference in Moldova's
domestic affairs" a decision of the Russian State Duma to set up a commission
to deal with the Dniester region, BASA-press reported on 19 February. The newly
created panel is to tackle the political and economic problems of Moldova's
breakaway region as well as the issue of the presence of Russian troops there,
Dniester media reported on 18 February. The 12-member board is headed by Adrian
Puzanovski, an active supporter of Dniester interests in the Russian
legislature. Deputies in the Dniester legislature welcomed the Duma panel as a
step from "declarations to concrete actions." -- Dan Ionescu

BULGARIAN ENERGY MINISTER ON DANGERS OF NUCLEAR POWER. Georgi Stoilov on
19 February became the first Bulgarian top official to discuss safety lapses in
the country's energy program, AFP reported. Stoilov, a member of Ecoglasnost
who was appointed minister with the rest of the interim cabinet on 12 February,
said on state radio that the country's controversial Kozlodui nuclear power
plant is "very dangerous" and a serious public health threat. "In my opinion,
the danger exceeds an acceptable level of risk," he said. -- Stan Markotich

BULGARIAN TRADE MINISTER TAKES STEPS TO BOOST EXPORTS. Daniela Bobeva,
caretaker minister of Trade and Foreign Economic Cooperation, has created an
off-budget Center for Encouraging Exports and begun talks with the EBRD for
assistance in creating a facility to provide export credits, insurance, and
guarantees, Pari reported on 20 February. Bobeva stressed the importance
of signing agreements on the protection of investment and of joining CEFTA.
Meanwhile, food prices have risen by 30% in the last week, with local
economists predicting 100% inflation in February, 24 chasa wrote on 19
February. Those economists noted that the 1996 budget deficit was 11.2% of
GDP--despite large cuts in spending on defense and social welfare--due to
soaring interest expenditures. Finally, the Energy Ministry has proposed
raising electricity and heating prices by 3.5 times effective 1 March. --
Michael Wyzan

ALBANIAN UPDATE. President Sali Berisha visited stricken towns on 19
February to shore up support for his administration and for his handling of the
crisis triggered by the recent collapse of several pyramid investment schemes.
Berisha told an estimated 1,500 "hand-picked supporters" in Elbasan: "We cannot
pay their debts but we can intervene to speed up growth and ensure the economic
recovery of the people," Reuters reported. Meanwhile, Vehbi Alimucaj, director
of VEFA Holding (one of the investment firms), said on 19 February that his
company will reimburse investors. The company's repayment strategy will take
about three months, Alimucaj said. -- Stan Markotich